NYT: The Subprime Crisis- Known in March 2007

[Mort Zuckerman]

To: emcsw...@nasw.org, zerh...@od.nih.gov,
Spin...@yahoogroups.com, kshe...@calea.org, fit...@gmail.com,
patrick.f...@usdoj.gov, model...@sbcglobal.net,
jdr...@nejm.org, let...@courant.com, Jgerb...@cdc.gov,
michae...@po.state.ct.us, con...@po.state.ct.us, executive-
edi...@nytimes.com, managin...@nytimes.com, news-
ti...@nytimes.com, the-...@nytimes.com, biz...@nytimes.com,
for...@nytimes.com, me...@nytimes.com, nati...@nytimes.com,
dv...@cdc.gov, brigidc...@optonline.net, tr...@hotmail.com,
illino...@aol.com, jle...@courant.com, tinaj...@yahoo.com,
jhorn...@fff.org, thomas...@usdoj.gov,
thoma...@po.state.ct.us, kur...@washpost.com,
georg...@washpost.com, p...@allegorypress.com,
commissi...@po.state.ct.us, FalN...@aol.com,
brans...@comcast.net, vts...@comcast.net, o...@po.state.ct.us,
freet...@charter.net, scott....@po.state.ct.us,
govern...@po.state.ct.us, attorney...@po.state.ct.us,
randall...@usdoj.gov, robert....@yale.edu
Cc: fra...@ucia.gov, dr-ahma...@president.ir,
eugener...@washpost.com, hor...@courant.com,
bmi...@newstimes.com, tr...@hotmail.com, rast...@aol.com,
billc...@gmail.com, amcg...@rms-law.com, rjmu...@aol.com,
paulcrai...@yahoo.com, sidney_b...@yahoo.com,
criminal...@usdoj.gov, karla.d...@usdoj.gov,
christophe...@usdoj.gov, richar...@yale.edu,
harol...@yale.edu, james.p...@yale.edu, inq...@aldf.com,
ly...@idsociety.org

Subject: NYT: The Subprime Crisis- Known in March 2007

Date: Nov 8, 2008 6:46 AM

Um, if you read the full text in The New Yorker for October 20th
I think, you will see that that French banker, Kerviel or whatever his
name was, knew about the American Subprime Crisis in March of 2007.

So this editorial in the NYTIMES is wrong.

http://www.newyorker.com/reporting/2008/10/20/081020fa_fact_stewart

You have to get the full text. It's not online free,
but this much is:

"In January, 2007, Kerviel began taking large short positions on the
German
stock market, the DAX, betting that the American sub-prime mortgage
crisis would
spill over into Europe and drag down the major averages. By late
March, his short
position had grown to billions of euros."


If you ask me, that's what "The Surge" was about. Buying more time,
or rather, more opportunity to "win" the oil fields.


KMDickson
http://www.ActionLyme.org

=====================================
http://www.nytimes.com/2008/11/08/opinion/08sat1.html?hp=&pagewanted=print

The New York Times
Printer Friendly Format Sponsored By

November 8, 2008
Editorial
Money Really Is Fungible

Just weeks after the Treasury Department gave nine of the nation’s top
banks $125
billion in taxpayer dollars to save them from unprecedented calamity,
bank executives
are salting money away in billionaire bonus pools to reward themselves
for their
performance.

Outraged? The bankers ***(who didn’t anticipate the subprime
crisis)*** were ready
for that. So they are assuring everyone that this self-directed
largess won’t be
paid with the same dollars they got from taxpayers. They’ll use other
ones.

What we want to know is will they be marking the bills so they can be
sure which
is which?

Unfortunately, the legislation that created the $700 billion rescue
fund barely
touched on the problem of executive compensation — limiting bonuses
only when they
are found to have been based on inaccurate statements of earnings or
when they are
deemed to encourage bankers to take “unnecessary and excessive risks.”
The new Congress
should impose tighter limits on executive pay at banks taking taxpayer
money.

Meanwhile, other ways should be explored to recover undue rewards. New
York’s attorney
general, Andrew Cuomo, sent a letter last week to all of the banks
that got money
from the Treasury Department asking for information about their bonus
pools. He
already has used laws on fraudulent payments to convince the American
International
Group, the insurance giant, to suspend some bonuses.

Banks cannot simply do away with all bonuses for past performance.
Many are cooked
into contractual agreements. And they are shrinking anyway. The New
York State Assembly
(which depends on Wall Street payouts for tax revenue) forecast that
financial-industry
bonuses would fall 41 percent, on average.

Still, there is a solid argument to deny bonuses to executives who
eagerly gorged
on dodgy securities that drove the banks to the brink of collapse.
There is also
a solid argument for clawing back the bonuses they made during the
subprime-mortgage-backed
boom times that set the stage for the present disaster.

This isn’t just an issue of fairness; it’s sound business practice. It
is past time
that banks — which turn to the taxpayers for help when they get in
trouble — institute
a system of incentives that aligns rewards with long-term success.
It’s about tempering
bankers’ intemperate appetite for risk, which has led this country
into the most
desperate financial crisis since the 1930s.

The new Congress should take up this issue. For starters, it should
tighten limits
on executive compensation for bankers who have taken taxpayer money.
Representative
Henry Waxman, the chairman of the House Committee on Oversight and
Government Reform,
has already asked the nine banks for data about bonuses.

All financial institutions must review their compensation practices.
They must do
away with a system of rewards that encourages bankers to throw away
all caution
in pursuit of short-term profits — leaving shareholders and taxpayers
holding the
empty bag.

Home